A pawn shop business loans money to customers, using jewelry, electronics, collectibles and other personal items as collateral. In the state of New York, a pawn shop business is known officially as a collateral loan broker. The state and the locality where you intend to set up require several legal filings before they will issue the necessary permits and licenses to open your pawn shop.

Things You Will Need
  • Business/assumed name or similar state business certificate

  • Certificate of Authority

  • Federal employer identification or tax identification number

  • Municipal pawnbroker license

Step 1.

File a business/assumed name certificate with the county clerk where your business is located, if you are operating a sole proprietorship under a name different from your own. File a partnership certificate with the clerk if you are operating as a partnership. Corporations, limited liability companies and limited liability partnerships need to register with the New York Department of State. If you have incorporated outside of the state of New York, you must file a certificate of good standing from the secretary of state in the state where you are registered.

Step 2.

File an application for a certificate of authority from the New York State Department of Taxation and Finance. The department will issue you a sales tax identification number, which is required on your license application. You apply for the certificate of authority online at nystax.gov or by calling 800-698-2909. You will also need a federal employer identification number or tax identification number, via filings with the Internal Revenue Service.

Step 3.

Obtain a $10,000 surety bond, with the Department of Consumer Affairs named as the certificateholder; submit also the receipt showing the expiration date and payment in full for the bond. Surety bonds guarantee the payment of anyone with a legal claim against your business, up to the dollar limit.

Step 4.

Have fingerprints taken at the nearest Department of Consumer Affairs Licensing Center. The state uses your prints to run a criminal background check and makes an exception for anyone already holding a DCA license within the past three years. Fingerprints are otherwise required for sole proprietors, partners, company directors, corporate officers and any shareholders with more than 10 percent of stock in the business.

Step 5.

Obtain the necessary city or county license to operate a pawn shop. If you will operate in New York City, you file at the DCA Licensing Center, 42 Broadway, Fifth Floor, New York, NY 10004. You will need a pawnbroker license as well as secondhand dealer general license. The license expires on April 30; the fee is $500 if you apply between May 1 and September 30; $250 if you apply between October 1 and April 30, with an option to pay in advance for the renewal of the following year, at $500.


You must have fingerprints taken within five days of filing an online pawnbroker license application. Fingerprinting requires a photo identification and a $75 processing fee. If you are operating as a sole proprietorship or as a partnership, you must also submit a child support certification Form, which gives information on any current child support obligations.


If you are dealing in firearms, you also need to obtain the necessary permits and licenses for that line of merchandise, which are much more restrictive than simple pawnshop licenses. Several federal laws also govern the operation of pawnshops, including the Patriot Act, IRS rules, the Truth in Lending Act and FTC privacy rules.